Calgary-based Perpetual Energy Inc. has proposed donating its interests in assets and resource rights to an Alberta county as part of a desperate attempt to cope with a property tax bill the company says far outstrips its ability to pay.

The extraordinary proposal comes as oil and gas companies have lobbied municipalities across Alberta for property tax breaks in a bid to cut costs in the oil price rout, with limited success.

Perpetual, a junior company controlled by oilpatch tycoon Clayton Riddell, said its $41,500 tax bill from Athabasca County would swallow up all of its cash flow generated by oil and gas reserves in the municipality.

Sue Riddell Rose, the company’s president and chief executive, said the producer has faced a similar problem in other municipalities, and not just this year. She said the assessed values of Perpetual’s oil and gas properties far exceed what the company believes they are actually worth, which leads to high tax bills.

Riddell Rose has proposed to Athabasca County and other municipalities that Perpetual would give them its interests in oil and gas assets and resource rights, with offers to potentially operate the assets on their behalf.

“If we’re willing to donate them or give them away, that means they (government assessors) have a different value in mind for them than we do,” said Riddell Rose, whose company is seeking relief in about 17 counties.

Athabasca County has so far rejected Perpetual’s pleas for relief, which also included a request to cut its tax bill to $1, though Reeve Doris Splane said she is willing to have further discussions with the company.

In a letter denying tax cuts, Splane said the province is responsible for setting property assessments while she defended the county’s mill rate, which she said ranked 27th among 64 rural municipalities last year.

“If we were to lower taxes in this particular case, that’s precedent-setting for other industries and pretty soon the county isn’t functional,” Splane said in an interview Thursday.

Al Kemmere, president of the Alberta Association of Municipal Districts and Counties, said many of his members have received requests for tax relief from the oil and gas sector during this prolonged period of low commodity prices.

Canadian Natural Resources Ltd., the country’s largest heavy oil and natural gas producer, is asking municipal governments across Alberta for a 30 per cent tax cut, warning rising tax bills could force the company to abandon wells early.

Riddell Rose made a similar argument Thursday, citing a field of wells Perpetual shut-in last summer in the Municipal District of Opportunity north of Edmonton, a decision she blamed on high taxes.

Kemmere said he is aware of only one of his members, the Municipal District of Greenview, that has cut its taxes as a result of pleas from the oil and gas sector.

Kemmere said Alberta’s recession has hurt industries across the economy, which means it would be unfair to offer tax breaks to one of them.

Municipal governments are faced with continued demand for services while dealing with declines in revenue from failed resource companies no longer paying their taxes, Kemmere said. In some municipalities, he said total assessed values of resource properties have dropped.

“We understand the challenges that they’re having,” Kemmere said. “It’s just that this (downturn) is felt on such a broad scale that to only deal with one diminishes the value of the others.”

According to the Canadian Association of Petroleum Producers, property taxes are the industry’s second-highest government cost, next to royalties, and are far higher than taxes levied against agricultural producers.

Riddell Rose said she has lobbied the province for what she considers a better means to assess the value of resource assets. But in a brief statement Thursday, the government said it largely hasn’t changed its approach.

Three companies have so far appealed their assessments, but many more are unhappy with their bills.

Jayhawk Resources Ltd., a junior natural gas producer with 60 wells northwest of Calgary, said Clearwater County is making more money from the company in property taxes than it does after all of its expenses are paid off.

“We’re trying to get a return on investment, but these guys are taking it all,” said Dave Meleshko, the company’s president. “Out of what’s left, we’ve got to pay ourselves and we all took big pay cuts just to keep the thing afloat.”

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